Blockchain Solution For Aviation Refuelling Developed By Gazpromneft-Aero And S7 Airlines

Blockchain, Innovation, News | August 27, 2018 By:

Gazpromneft-Aero has teamed with S7 Airlines to develop and implement a blockchain solution to enhance the efficiency of aviation refuelling processes.

Gazpromneft-Aero, a subsidiary of Gazprom Neft, supplies aviation fuels at airports worldwide. The company offers aviation kerosene and refining by-products, and operates fuel-supply systems. Its services include organization of the aviation-fuel supplying of partner-airline aircraft, provision of a service package for the supplying of aircraft with aviation POL and special fluids (SF); quality control of aviation fuels, oils, and lubricants. The company sells fuels to the respective airlines under direct contract.

S7 Airlines is an airline headquartered in Ob, Novosibirsk Oblast, Russia, with offices in Moscow. It is one of Russia’s biggest domestic airline, with its main bases at Domodedovo International Airport and Tolmachevo Airport. S7 Airlines also operates scheduled flights to countries in the CIS, Europe, the Middle East, South-East Asia and the countries of the Asia-Pacific region.

The two parties developed a new system, called aviation fuel smart contract (AFSC), to help improve the speed and efficiency of reciprocal settlements in aviation refuelling, as well as automate planning and accounting in fuel supplies. The new sytem will enable aviation companies to make instant payments for fuel directly on refuelling aircraft, without pre-payment, bank guarantees or any financial risks to the parties involved.

The first refuelling of a S7 scheduled flight using the AFSC system took place at Tolmachevo airport (Novosibirsk), where a Gazprom-Aero refuelling complex is located.

“In initiating a smart contract through the AFSC system, S7 Airlines transfers information on the planned refueling of a future flight to Gazpromneft-Aero, fixing the initial fuel volume, and its price,” Gazpromneft said. “Data is used to assign the technical task to a tanker driver, at the airport. On the day of refueling, the airline pilot asks the operator for a specific volume of fuel, through the system, following which an online application is sent to the airline’s bank to hold the required amount on account. Instant confirmation from the bank initiates the refueling process. The service completed, payment is settled, with the fuel supplier and airline’s commercial departments being sent information on the completion of refuelling, together with all accounting documents.”

Anatoly Cherner, Gazprom Neft’s Deputy CEO for Logistics, Refining and Sales, said that the development and implementation of digital services like this is an important element in creating a digital platform for managing the logistics, processing and sale of oil products at Gazprom Neft.

“Implementing digital transformation projects in cooperation with major partners will enable the company to reach a new level in technological and operational efficiency, right now,” Cherner said.

Pavel Voronin, Chief Information Officer of S7 Group, said that S7 has been analyzing forward-looking technologies, including blockchain.

“We were the first to being using smart-contracts for letters of credit,” Voronin. “After that, we developed a blockchain platform to automate trading operations with various counterparties, and launched a mutual-settlement service for air-ticket sales agents. Our next step is a service to automate accounting in refuelling. This means automating trading operations between three parties — the bank, the airline, and the refuelling company. Under established procedures, once refuelling is complete, reconciliation takes place and settlement is made. Technology means transparency in reciprocal settlements is improving, meaning we can abandon a range of manual operations, and speed-up processes.”